Indices Construction Methodology

OKEx

May 23, 2018 08:49

Updated

Objective

Over the past year, the meteoric rise of digital asset has drawn hordes of investors from around the world. The market capitalization has reached up to an astonishing USD600 billion. This intrigued a lot of new traders who see the potential benefits of blockchain, but they lack a systematic reference for making trading decisions.

In consideration of the above, we would like to introduce the OK05 & OK06 indices:

OK05 index tracks the most presentable tokens in the current market to serve as a benchmark that allows investors to track and replicate easily.

OK06 index tracks OKB and also the constituents of OK05. It reflects the performances of the most important tokens on OKEx.

Constituent Eligibility

OK05 index

The eligible token must be listed and tradable on OKEx for over 90 days;

The eligible token must be an open source blockchain project / project with an open source testing network;

The eligible token must be the top 10% by 30-day avg. trading volume in USDT market;

The eligible token must be decentralized. No individual or institution should hold a large percentage of the token;

The eligible token must not be defined by regulatory authorities as "securities".

OK06 index

All the constituents of OK05 index are eligible for OK06 index automatically;

OKB, as the utility token of OKEx, is eligible for OK06 index by default.

Compilation Methodology

OK05 index

The number of constituents is fixed at 5. The top 5 tokens by market capitalization will be chosen from the constituent selection. Market capitalization = circulating supply * price in USDT. Note: the circulating supply is recorded from the constituent's official blockchain explorer, the value will be updated before each rebalancing.

OK06 index

The number of constituents is fixed at 6 (including OKB). All the constituents of OK05 index will be selected automatically as the constituents of OK06 index. As the key innovation product and the vital piece of architecture of OKEx, OKB is a representation of OKEx’s ecosystem. Therefore, it is selected as a constituent of OK06 index.

Index Calculation

Index Maintenance

Rebalancing

Changes in market capitalization of the constituents, due to (1) the price change of the constituents and (2) the increase of circulating supply caused by miners, will be rebalanced over a certain period of time. We will recalculate and rearrange the constituents' order by the updated circulating supply and market capitalization every Friday at 16:00.

Change of Index Constituents

A constituent may no longer meet the eligibility criteria over time and have to be removed from the index. Therefore, we will reevaluate the constituents every week with the following standard:

Every day, we will calculate the ranking of the constituent selection by market capitalization at a fixed sampling time.

At the first rebalancing of a month, the system will calculate if the top 5 constituents of the current month are the same as the last month’s. No replacement will be made if they are the same.

If the constituents are different, we will evaluate the performance of all sampling point of the new constituent in the past month. If the new constituent is eligible to be the top 5 by market capitalization in over 2/3 of the sampling times, the new constituent will replace the ineligible one. Weighting will be recalculated by the same index formula.

Remarks

The base date of the index constituents is 16:00 May 4, 2018. We will arrange the order by circulating supply and market capitalization of that day. Any information before the above-mentioned time will not be taken into calculation.

Appendix 1

The last traded price of the constituents of OK05 index at 16:00 Feb 9, 2018 (USDT pairs)

BTC/USDT = 8062.0000

ETH/USDT = 810.9699

BCH/USDT = 1273.4000

LTC/USDT = 144.5000

EOS/USDT = 8.3100

The last traded price of the constituents of OK06 index at 16:00 Mar 23, 2018 (USDT pairs)